G/SCM/Q2/CAN/77  
 
30 March 2022  
(22-2608) Page: 1/5 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
REPLIES TO THE QUESTIONS POSED BY THE UNITED STATES1  
REGARDING  THE NEW AND FULL NOTIFICATION OF CANADA2 
The following communication, dated and received on 28 March 2022, is being circulated at the 
request of the delegation of Canada . 
 
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Question 1  
a. For the program entitled " Fisheries and Aquaculture Clean Technology Adoption 
Program (FACTAP)," what equipment, if purchased, would be eligible for 
assistance? Would any of this equipment increase the capacity of commercial 
fisheries?  
Reply : 
FACTAP funding is used to measurably improve the impact on the environment of existing "off the 
shelf" fishing technology. This also applies to aquacultural operation projects that focus on 
pilot-demonstration, pre -commercial, and early commercial developm ent according to Canada 's 
Clean Growth Hub – Technology Readiness Level (TRL) scale3. FACTAP does not prescribe what 
specific equipment is eligible under the program, however eligible funding, including for equipment, 
is assessed based on its contribution  to achieving the program objectives.  
Activities that do not qualify for funding include:  
i) early-stage research and development activities (TRL 1 – 6);  
ii) fisheries, aquaculture, processing operational start -ups (e.g., new businesses) 
nor company expansion p rojects (e.g., production increases);  
iii) major capital purchases, such as buildings and rolling stock;  
iv) improvement not directly tied to the adoption of clean technologies or 
measures; and  
v) projects that only use fish as part of their production process, but  aren't the 
primary product resulting from the operation  (e.g., hydroponics).  
Equipment would not increase the capacity of commercial fisheries. Equipment supported under 
FACTAP does not manage or influence the establishment, for example, of Total Allowabl e Catch limits 
or other fishery -specific management controls for any given fishery that a funding recipient may be 
licensed to participate in. Project funding supports targeted investments that improve environmental 
outcomes at the individual company level  rather than increasing the capacity of commercial fisheries. 
Major capital purchases are not permitted, so larger capacity vessels are not eligible for funding.  
 
1 G/SCM/Q2/CAN/72  
2 G/SCM/N/372/CAN  
3 Technology Readiness Level (TRL) Assessment Tool - Clean Growth Hub (ic.gc.ca)  G/SCM/Q2/CAN/77  
 
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  b. Can Canada confirm that the program terminated as expected on 31 March 2021?  
Reply : 
The original FACTAP program ended on 31 March 2021 but was subsequently renewed in June 2021 
for another 2 fiscal years ($10M for 21/22 and 22/23).  FACTAP is currently set to end on 
31 March  2023.   
Question 2  
a. For the program entitled " Quebec Fisheries Fund (QFF)," how does a commercial 
fisher "demonstrate maximum economic benefits accruing to the Quebec region" 
to be eligible for the subsidy?  
Reply : 
The QFF aims to stimulate innovation in Quebec 's fish and seafood sector, and support its 
devel opment. Eligible project applicants must demonstrate that they are responding to an 
opportunity in Québec 's fish and seafood sector (including commercial fisheries, aquaculture of 
processing sectors) to meet increased market demand for products that are hi gh quality, 
value -added and sustainably sourced.  Demonstrable benefits include supporting industry 
development in Québec, for example, through:  
i) innovation  that encourages new products and technologies  
ii) infrastructure  that encourages the use of new technologies or processes to 
support the sustainable development of the sector  
iii) new science partnerships  between industry, academia, and other research 
institutions that will:  
a. improve knowledge of the impacts o f ecosystem changes on commercial 
fisheries  
b. support the implementation of sustainable harvesting technologies  
Proposed activities, a planning process, expected results (i.e., demonstration of benefits accruing to 
Québec) and planned long -term actions are r equired in the application.  
b. Is any portion of the subsidy contingent on or supportive of increasing fishing 
capacity of commercial fishers?  
Reply : 
No. Funding is not contingent on or supportive of increased fishing capacity of commercial fishers.  
Question  3 
a. For the program entitled "Regional Economic Growth through Innovation Steel and 
Aluminium Initiative" we understand that the Government of Canada provided at 
least CAD  4.2 million to steel projects in Manitoba. In Canada's notification, it is 
indicated that a total of CAD 6.9 million was provided to all provinces 2019 -2020. 
Does this mean that steel and aluminium projects in Canada's other provinces only 
received CAD  2.7 million in total?  G/SCM/Q2/CAN/77  
 
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  Reply : 
The Steel and Aluminum  Initiative was a national program delivered by various regional development 
agencies (RDAs) across Canada. For example, programming for the Atlantic region of Canada is 
delivered by the Atlantic Canada Opportunities Agency through the Regional Economic Gr owth 
through Innovation Steel and Aluminium Initiative. The program provided $6.9 million in assistance 
to small - and mid -size businesses in the Atlantic region of Canada that use steel and aluminium as 
an input to their production processes.  
For other re gions of Canada, the Steel and Aluminum Initiative is delivered by the RDAs responsible 
for the respective region, with funding delivered under the terms and conditions of their respective 
Regional Economic Growth through Innovation (REGI) program.  As such , those RDAs reported total 
funding provided under their respective REGI program for their region. The portion of REGI program 
funding notified by these RDAs attributable to the delivery of the national Steel and Aluminum 
initiative in their region is as f ollows:  
Region  Funding, FY 2019 -20  
($, million)  
Northern Ontario  3 
Southern Ontario  39 
Northern Territories  0 
Quebec  26 
Western Canada  24 
 
b. We understand that this program was launched to provide CAD  100 million in 
non-repayable contributions to SMEs within Canadian steel and aluminium supply 
chains for innovative projects that will enhance productivity. What proportion were 
provided to steel producers versus aluminium producers? How has the increase in 
productivity as a  result of this investment increased the production capacity of 
recipients of this funding?  
Reply  : 
The program is not applicable to firms that produce steel or aluminum. Rather, the program is open 
to small - and mid -size enterprises that are intensive use rs of steel and aluminium. As the program 
is only applicable to steel and aluminum users, funding would not impact steel and aluminum 
production capacity. Moreover, as funding recipients include enterprises with innovative projects 
such as those that would  transform their business to produce something new, it is often not possible 
to directly link funding to increased production capacity.  
Question 4  
a. We understand that the Government of Canada maintains a "Strategic Innovation 
Fund" ("SIF") which has provided financing for 100 projects. We do not see a 
program with this name contained in Canada's notification, has this program been 
notified under a different name or is the program othe rwise contained in Canada's 
notification? We understand that this program has funded five projects involving 
Canadian steel companies (two projects with Algoma Steel, one with Algoma Tubes 
and Prudential Steel, one with Gerdau Ameristeel, and one with Nova  Steel). For 
each of these projects, please provide the amount of funding provided and the 
terms or conditions of any equity stake obtained or repayment required.  
b. We also understand that on 21 August 2019 the Government of Canada announced 
that it would in vest CAD 18 million in Heico Canada to diversify its product mix and 
supply the market with more high -quality, value -added wire and wire rod product. 
What are the terms of this investment and will additional capacity be supported by 
this investment?  
c. On 9 M arch 2019, the Government of Canada announced a grant of CAD 11.5 million 
to ArcelorMittal Canada Inc. to make improvements and upgrades to the company's G/SCM/Q2/CAN/77  
 
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  Hamilton, Ontario facilities. According to the Government of Canada's 
announcement, "with this investm ent, ArcelorMittal will be the only Canadian 
supplier of this steel product to service the growing demand in the Canada and 
Northern US regions." What are the terms of this investment and will additional 
capacity be supported by this investment?  
d. On 10 Janu ary 2019, the Government of Canada announced that it would commit 
CAD 30 million from the SIF to support investments in Algoma's steel making 
facilities in Ontario. These investments include projects to adopt new technologies, 
improve productivity, and sus tain competitiveness in the global market. We 
understand the improvements will help Algoma modernize its core production 
assets, including the steel rolling and steel plate mills, which will position the 
company to offer a wider range of steel grades and i ncrease production 
capabilities. What are the terms of this investment and will additional capacity be 
supported by this investment?  
e. On 6 March 2019, the Government of Canada announced a CAD  40 million 
investment that will upgrade steel producer Evraz's fa cilities in Regina, 
Saskatchewan and Red Deer, Alberta. The funding will support numerous upgrades 
to Evraz's facilities in western Canada and increase its competitiveness in serving 
the oil country tubular good market. The CAD  40 million in funding repres ents 35% 
of the project's cost. What are the terms of this investment and will additional 
capacity be supported by this investment?  
f. On 19 July 2019, the Government of Canada announced a CAD  14 million 
investment in Nova Tuba for a project in Montreal, Queb ec. What are the terms of 
this investment and how much additional capacity will be supported by this 
investment?  
g. On 26 July 2019, the Government of Canada announced that it would provide a 
CAD 16 million grant to Algoma Tubes' seamless mill in Sault Ste. M arie, Ontario, 
and its Prudential welded mill in Calgary, Alberta. What are the terms of this 
investment and will additional capacity be supported by this investment?  
h. On 14 August 2019, the Government of Canada announced a CAD  49.9 million grant 
to Stelco  to upgrade its facilities in Hamilton and Lake Erie, Ontario What are the 
terms of this investment and will additional capacity be supported by this 
investment?  
Reply : 
The SIF is a sector -agnostic program available to firms in all sectors and all regions of Canada. A 
firm's regular business operations (e.g. production) are not eligible for SIF contributions. SIF 
contributions exclusively support pre -defined innovation project activities carried out by a firm. The 
program does not obtain equity stakes in th e projects it supports. SIF contributions consider the 
minimum amount required for project activities to proceed and are typically repayable, however, 
under limited circumstances a project - or portion of it - may be considered for a non -repayable 
contribu tion (e.g., demonstrated potential for technology spill -over).  
 
The SIF funds projects with an innovation component typically requiring R&D investments, high -
skilled jobs and STEM training for employees. All publicly available terms of investments such as a 
project 's R&D investments, jobs, co -ops, or environmental commitments can be accessed through 
Government of Canada 's proactive disclosure portal  (Proactive disclosure | Open Government, 
Government of Canada ) 
Further, and through  international fora such as the Global Forum on Steel Excess Capacity, Canada 
has committed to not support additional crude steelmaking capacity and worked closely with like -
minded economies to advance collective solutions to the global issue of steel exce ss capacity. As 
such, SIF funding towards the Canadian steel sector has supported the advancement of new 
processes or technologies, including innovations with the potential to reduce waste generated, attain G/SCM/Q2/CAN/77  
 
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  Canada 's carbon reduction commitments, for exampl e. SIF funding does not support additional crude 
steelmaking capacity.   
SIF FUNDING INVOLVING CANADIAN STEEL COMPANIES (SUB -QUESTION (a))  
Firm name  Contribution  Terms  
Algoma Steel inc. (2019)  $30M  Repayable  
Algoma Steel Inc. (2021)  $200M  Repayable  
Algoma Tubes Inc. and Prudential Steel Ltd. (Tenaris) (2019)  $14.7M  Partially repayable  
Gerdau Ameristeel corp.  (2019)  $20M  Partially repayable  
Nova Tube Inc.* (2019)  $14M  Repayable  
*Though the question 4.a mentions "Nova Steel " we believe that this was a typo and that the project in 
question was in fact the project with Nova Tubes.  
 
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